Progress pill
The Law

The Role of Law and the State

Bastiat Economic Thought

The Role of Law and the State

In 1848, Bastiat was a deputy. He was appointed vice-president of the finance commission. He was, therefore, particularly well-placed to answer this question: what is the State? We turn to the State to ensure our well-being. But Bastiat reminds us that the State cannot give anything to the citizens that it hasn't first taken from them.
Bastiat begins by overturning a commonly accepted equation: it’s the State that sustains the nation. However, the State cannot sustain its citizens because it does not produce wealth; it merely redistributes it. On the contrary, it is the citizens who sustain the State through the creation of wealth.
Furthermore, the State in itself does not exist; there are only men who constitute the State, who govern, administer, and who live off the State directly or indirectly. Therefore, the men who administer the State are like others; they seek to satisfy their personal interests.
And since the state's action is purely redistributive, it is subject to the pressure of special interest groups. Indeed, certain special interest groups have recognized that it is easier to generate profits through political engagement than through productive behaviors. They seek to steal the money of others under the guise of the State, undermining the market's production capacity through the multiplication of laws, taxes, and bureaucratic constraints.
In other words, the State only pursues clientelist objectives, and the notion of the general interest is rendered meaningless. Any gain obtained by some is at the expense of others: it is not a zero-sum game but a negative-sum game. Bastiat thus anticipates, a century in advance, the analyses of the political market's functioning that would emerge at the end of the 1950s with the so-called Public Choice school, led by James Buchanan, Nobel Prize in Economics, and his colleague Gordon Tullock.
Moreover, Bastiat asserts, the State has no rights that do not first preexist in the individual. Why does the State have the right to guarantee, even by force, the property of each individual? Simply because this right preexists in the individual. One cannot deny individuals the right to self-defense, the right to use force if necessary to repel attacks against their persons, their faculties, and their properties. This natural right of self-defense, which resides in all citizens, can take a collective form and legitimize a common force.
Therefore, to know if the State is legitimately vested with a right, one must ask if this right resides in the individual by virtue of their organization and in the absence of any government.
That is why the State cannot, in any case, infringe upon natural rights; it must, on the contrary, guarantee them.
It ensures Security, both internal and external, and Justice. It can be strong and effective in its domain. However, the law cannot step outside this very strict role, as it then becomes an instrument of plunder from some for the benefit of others. When the Law is perverted, it acts as an instrument of injustice. The perversion of the law always leads to plunder, as we have seen in the previous course. It is immediate, automatic, inevitable, and certain. Taking the law out of its domain can only infringe upon natural rights. Civil society is then stripped of its power (natural institutions, contracts, exchanges, and associations) in favor of state management, which is characterized by technocratic and bureaucratic approaches.
As a result, according to Bastiat, the only legitimate public services of a state are three in number: the military, the police, and the judiciary. In other words, the State must ensure the internal and external protection of individuals, their freedom, and their property. It is therefore normal for everyone to contribute to this protection. However, beyond these legitimate functions, any other contribution to another service provided by the State is subject to scrutiny. Outside of this circle, Bastiat writes:
Religion, education, association, labor, exchanges, everything belongs to the domain of private activity, under the eye of public authority, which should only have a mission of surveillance and repression.
Regarding public services, he states a simple principle: If you want to create a function, prove its utility. Demonstrate that the services it provides are worth the cost. Hence, he concludes, it is reasonable to entrust to the public sector only what the private sector absolutely cannot accomplish.
In summary, when a government oversteps its mission of defending people and property, it encourages interest groups to seek privileges and influence power to obtain benefits at the expense of taxpayers and consumers.
The State is the great fiction through which everyone endeavors to live at the expense of everyone else.
Wrote Frédéric Bastiat in a short pamphlet titled The State.
Quiz
Quiz1/5
Which twentieth-century school of thought does Bastiat prefigure?